Build the Corridor — A Peruvian Infrastructure Regulator Under a Fixed Budget

A four-round, advanced regulatory-economics and infrastructure-finance simulation set inside ARIC, a fictional Peruvian economic regulator stewarding the Lima – Junín – Huánuco transport corridor. A multilateral concessional line and a political mandate have handed ARIC a fixed co-financing budget of S/ 2,400 million to catalyse private investment this cycle.

Four shovel-ready projects compete and together request S/ 5,100 million — more than double the envelope, so at least two must be cut, deferred or restructured: a flagship toll road (investor IRR 14.2%, but a traffic forecast 30% above the independent study, serving the wealthiest sub-region), an urban transit link (IRR 10.8%, social ERR 16%), a bridge-and-access package for an isolated province (the highest social return at 22% ERR, but only 8.1% investor IRR — below the 10.5% private-capital hurdle, so it will not be built without a subsidy), and a logistics terminal (IRR 12.1%).

Playing the regulator through Urrunaga's lens on the regulatory economics of infrastructure, you steer four KPIs across the corridor's life: social value delivered, budget committed against the S/ 2,400M envelope, Treasury exposure (the present-value contingent liability from minimum-revenue guarantees), and renegotiation risk.

Round 1: appraise and rank — separate bankability from social value, scrutinise the flagship road's inflated forecast and decide which number to regulate on, and locate where public co-financing adds genuine additionality. Round 2: allocate the fixed budget — fully fund, partially fund, defer or reject each project, with the bankable-only trap, the thin even spread and the starved social bridge as the failure modes.

Round 3: structure the deal — concession length, tariff level and indexation, demand-risk allocation, and a capped-and-priced versus uncapped minimum-revenue guarantee. Round 4: defend the decision memo before a multilateral lender and the finance minister.

The math rewards ranking on social return, regulating on the independent forecast, funding the high-additionality bridge with portfolio discipline, capping and pricing guarantees, and a balanced affordable tariff — and uses sticky penalty flags so the five classic errors (funding only the bankable projects, accepting the +30% forecast, uncapped guarantees, pricing purely to the hurdle, and spreading the envelope thin) cannot reach the top verdict.

Final KPIs track social value, Treasury exposure, renegotiation risk and ARIC's regulatory credibility. Currency throughout is the Peruvian sol (S/).

An advanced simulation for participants used to working with the main frameworks and trade-offs of the subject, designed for executive education and experienced professionals.